Yes, under-dithering does not fully decouple the noise variance, but works well enough when you’re looking to lower the noise at the expense of small noise modulation.
The boost at the lower frequencies helps MBIT+ to achieve more reduction in the midrange.
If I remember correctly, the filters used in the feedback loop have been designed as min-phase FIRs. I don’t think we’ve hit any problems with their stability, once they are properly normalized.